Correlation Between Prime Lands and Kandy Hotels
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By analyzing existing cross correlation between Prime Lands Residencies and Kandy Hotels, you can compare the effects of market volatilities on Prime Lands and Kandy Hotels and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Prime Lands with a short position of Kandy Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Lands and Kandy Hotels.
Diversification Opportunities for Prime Lands and Kandy Hotels
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prime and Kandy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Prime Lands Residencies and Kandy Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandy Hotels and Prime Lands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Prime Lands Residencies are associated (or correlated) with Kandy Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandy Hotels has no effect on the direction of Prime Lands i.e., Prime Lands and Kandy Hotels go up and down completely randomly.
Pair Corralation between Prime Lands and Kandy Hotels
Assuming the 90 days trading horizon Prime Lands Residencies is expected to under-perform the Kandy Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Prime Lands Residencies is 1.37 times less risky than Kandy Hotels. The stock trades about -0.3 of its potential returns per unit of risk. The Kandy Hotels is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Kandy Hotels on November 28, 2024 and sell it today you would lose (40.00) from holding Kandy Hotels or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Lands Residencies vs. Kandy Hotels
Performance |
| Timeline |
| Prime Lands Residencies |
| Kandy Hotels |
Prime Lands and Kandy Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Lands and Kandy Hotels
The main advantage of trading using opposite Prime Lands and Kandy Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Lands position performs unexpectedly, Kandy Hotels can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kandy Hotels will offset losses from the drop in Kandy Hotels' long position.| Prime Lands vs. HATTON NATIONAL BANK | Prime Lands vs. Keells Food Products | Prime Lands vs. National Development Bank | Prime Lands vs. Colombo Investment Trust |
| Kandy Hotels vs. RENUKA FOODS PLC | Kandy Hotels vs. Lighthouse Hotel PLC | Kandy Hotels vs. Renuka City Hotel | Kandy Hotels vs. Tangerine Beach Hotels |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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